[Special Report] Innovation Ecosystem in Turkey Ramping Up

By February 20, 2013 2 comments
innovation in Turkey

To get a better handle on the Turkish innovation ecosystem, L’Atelier went over to Turkey, more specifically Istanbul. We bring you a panorama of the major trends, in words and pictures.

If someone says Yemeksepeti to you, it will perhaps not mean very much to you. Nevertheless, this Turkish online food-ordering firm is arousing interest among investors worldwide. In September 2012, the startup raised $44 million from General Atlantic, a global growth investment firm. Earlier, in 2011, at national level, Peak Games, a leading company in the social games sector, raised $11.5 million from Hummingbird Ventures and EarlyBird Venture Capital.

Does this signal merely fleeting success or a real innovation ecosystem now taking root? At first glance it seems the second hypothesis is the correct one. Especially when we see that in 2012 Deloitte 500 slotted 29 Turkish companies into its top 500 EMEA ranking of the fastest growth technology companies, and that two of these companies are in the top ten: Ideasoft, which specialises in e-commerce software, and Pozitron, which develops mobile shopping apps. These companies have notched up successes not only in Turkey but also in a number of countries in the Middle East and Africa.

So which is the most dynamic sector? If you look at the most fashionable start-ups and examine the figures, that would be e-commerce. As far as the figures are concerned, the Association of Turkish Internet Retailers reckons that Turkey has achieved growth of 57% in this sector, showing revenues of $12.5 billion in 2012 (compared with $37.7 billion in France). In Turkey 7 million people now do their shopping online. And use of mobile devices here is also on the rise. At the moment mobile has only a 6% share in e-commerce, but looks set to achieve 10 - 12% by end 2013, rising to 50% in 2015.

The reasons behind this growth? Well, the Turkish economy is pretty healthy. With GDP at over $770 billion, the country is ranked 16th worldwide. Then the population stands at 74 million – a young population, keen on using new technology and determined to get hold of it. Close to three quarters of Turkey’s Internet users are under 34, according to ComScore. Some 36.4 million people use the Internet; there are 20 million subscribers. Alper Unal, Head of the New Technologies Department at Ubifrance, Istanbul, explained to L'Atelier at end 2012 that it’s often the telecoms operators and the banks that raise public awareness of innovative services. They seek to differentiate themselves through technology, and to appeal to a young clientele which is ready to pay for innovative, convenient services. Turkey is thus well-positioned for mobile payments, especially using services offered jointly by telecoms operators and banks.

All of this is underpinned by good mobile infrastructure. According to The Global Information Technology Report 2012 from Insead and the World Economic Forum (p.304), though Turkey lags behind on a number of innovation-related indices, it is the number one country in terms of  mobile network coverage.

As a result, there are 67 million mobile subscribers, of whom over 40 million are 3G users and 11 million mobile broadband users! This growth in telephone usage heralds the advent of a range of service offerings – and not just in the e-tailing sector. There are some hurdles which still need to be overcome, however. The centres of innovation are still extremely localised – basically in the Istanbul and Ankara areas. Moreover, the investor network, such as it is, really needs to start meshing better. And while the rate of ICT investment and usage is high in the urban centres, the country as a whole still has a long way to go.

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Submitted by can.kurdi - on February 22, 2013 at 11:17 pm

These numbers should be reflected in to the European Innovation Indexes.

Submitted by Celal zaim çil (not verified) - on February 23, 2013 at 11:36 pm

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